The S&P/ASX 200 Index (ASX: XJO) is enjoying a healthy day in the green so far this Thursday. At the time of writing, the ASX 200 has added a robust 0.76%. But the same can't be said of the Coles Group Ltd (ASX: COL) share price.
Coles shares are today trading at $17.13 at the time of writing. That's down a meaty 2.67% from yesterday's closing share price. So why are Coles shares being punished in the face of such a healthy broader market?
Well, fortunately for investors, it's likely due to one of the only nice reasons to have a company's share price fall. Today is the day that Coles trades ex-dividend for its upcoming interim shareholder payment.
During its half-year earnings report that was dropped back on 22 February, Coles declared an interim dividend of 33 cents per share. That will come fully franked, as is usual with this grocery giant. The 33 cents per share payment is flat on last year's interim dividend. But it is a modest increase from Coles' FY21 final dividend of 28 cents per share that was paid out back in September. It also represents a rise from Coles' FY20 interim dividend of 30 cents per share.
Coles' interim dividend leaves its share price
When a company trades ex-dividend, it means that any new shareholders going forward are not entitled to said payment. As such, the company's value falls because a dividend is essentially cash going out the door, never to return. That's why we typically see a commensurate fall in a company's share price when this happens. And that is what has happened with Coles today.
Investors can now look forward to receiving their interim dividend on 31 March later this month. In what might be a happy coincidence, Coles' arch-rival Woolworths Group Ltd (ASX: WOW) is also going ex-dividend today, which is why we also are now seeing a fall in the Woolworths share price.
At the current Coles share price, this ASX 200 supermarket operator has a market capitalisation of $22.91 billion, with a dividend yield of 3.56%.
